The new deal will keep Pandiani at the club until at least the summer of 2011.
Pandiani scored 11 times for Osasuna in the league this season.
“I am very happy and very proud to wear the shirt of Osasuna for another season,” the 34-year-old told the club’s official website.
“I had other offers but Osasuna has always been my priority and I am very satisfied to have reached an agreement.”
